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The Geography and Lives of the Poor: Evidence from Punjab. Ali Cheema Lyyla Khalid Manasa Patnam Lahore University of Management Sciences 2008. What is to follow. Identifying endemic poverty regions Changing regional socio-economic paths Poverty impact of different paths

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the geography and lives of the poor evidence from punjab

The Geography and Lives of the Poor: Evidence from Punjab

Ali Cheema

Lyyla Khalid

Manasa Patnam

Lahore University of Management Sciences 2008

what is to follow
What is to follow
  • Identifying endemic poverty regions
  • Changing regional socio-economic paths
  • Poverty impact of different paths
  • HH strategies and payoffs in different regions
  • Where do regional differences come from
motivation
Motivation
  • Lack of evidence on district-wise variation in poverty [World Bank 2002; Anwar, Qureshi and Ali 2004; Qureshi and Arif 2001)
  • Some Exceptions [Jamal PDR 2005; Malik 2005 and Gazdar 1999]
  • Putting poverty incidence in context of socio-economic change
  • Reveal patterns not causality
slide4
Constructing the Consumption Aggregate

Dataset: Punjab MICS (2003-04) representative at district level

Money-metric measure

The Aggregate Consumption Function (ACF) is constructed as follows:

a. Aggregate the various sub-components

b. Adjust for cost of living differences: Deflating Total Household Expenditure by Paasche’s Index to capture cost of living

c. Adjust for household composition

The Sub-components of ACF can be classified into four categories:

i. Food items

ii. Non-food items

iii. Consumer durables

Use Poverty line for 2000-02 defined by Planning Commission (Economic Survey 2006-07) and adjust it using CPI

slide5

Equivalence Factors for age/sex-specific official poverty lines

Source: Poverty Reduction Strategy Paper, 2003

the geography of poverty
The Geography of Poverty
  • High poverty clustered in the South and West regions
  • Constitute crescent of endemic poverty
the geography of poverty1
The Geography of Poverty

Head Count Overall

Head Count Rural

the geography of poverty2
The Geography of Poverty

Poverty Gap Overall

Poverty Gap Rural

the geography of poverty3
The Geography of Poverty
  • High poverty clustered in the South and South West districts
  • Severity of poverty highest in these districts
  • Deprivation index correlated with district poverty
measuring deprivation
Measuring Deprivation

Deprivation Indices:

Index 1

  • Education

Illiteracy Rate (10 years and above)- female

Illiteracy Rate (10 years and above)- male

Proportion out of school Children – female

Proportion out of school Children – male

  • Housing Quality

Proportion of Non-Pacca houses

Persons per room

Percentage of housing Units with one room

Percentage Non-owner households

Households with no latrine facility

  • Housing Services

Percentage of Unelectrified households

Percentage of households without gas

Percentage of households with no inside piped water connection

Households with no telephone connection

  • Employment

Unemployment rate [15 - 65 years]

Combining the indicators

    • Equal weights to different components of the index
    • Weights assigned by using principle component analysis (PCA)
slide12
Index 2 Includes Social Indicators:Under 5 Mortality Rates and Ante Natal care by skilled health workers
divergent socio economic paths

35.00

30.00

25.00

20.00

(% Farm Area)

North

Centre

West

South

15.00

10.00

5.00

0.00

1980

2000

1980

2000

Sharecropped

Leased

Divergent Socio-Economic Paths
  • Access to land deteriorating sharply for landless
  • Similar trend across all regions
divergent socio economic paths1
Divergent Socio-Economic Paths
  • Mitigated by diversification out of agriculture in North and Centre
  • Continued agrarian dependence in the South and West

Source: Population Census (1997) and MICS (2003-04)

the poverty impact
The Poverty Impact
  • Diversification out of agriculture negative correlate of poverty
  • Limited possibilities in the South and West exacerbating problem

Source: MICS (2003-04)

the poverty impact1
The Poverty Impact
  • Deteriorating access to land worsening matters

Source: MICS (2003-04)

the poverty impact2
The Poverty Impact
  • Incidence of poverty much higher
    • Labour dependent HHs
    • Long-term unemployed
  • Effect more pronounced in South and West

Source: MICS (2003-04)

using dependents
Using dependents!

Proportion of dependents much higher in South and West

Source: MICS (2003-04)

the poverty impact3
The Poverty Impact
  • Related vulnerabilities in the South and West

Source: MICS (2003-04)

hh coping strategies
HH Coping Strategies
  • Intra HH occupational diversification
  • Similar trend across all regions

Source: MICS (2003-04)

does it pay
Does it pay?
  • Not at the same rate across all four regions!
  • Much flatter effect in the South and West

Source: MICS (2003-04)

creating remittances
Creating Remittances
  • Stark regional differences

Source: MICS (2003-04)

the remittance effect
The Remittance Effect
  • Strong negative correlate of poverty

Source: MICS (2003-04)

migration and remittances
Migration and Remittances

No of migrants per HH explains a large part of variation in remittances

However, presence of endogeneity

Source: MICS (2003-04)

migration and remittances1
Migration and Remittances

Use mean rainfall as IV for number of migrants

Controlling for HH size West and South more migrants per HH

But proportion of remittance income much less in South and West

Indicates migrants from North entering a different segment of labour market

Source: MICS (2003-04), Punjab Economic Report (2004-05)

missing investments
Missing Investments
  • In part the answer lies in missing investments

Source: MICS (2003-04)

where do the differences come from
Where do the differences come from?

History

An earlier migration

A large part still unexplained!

Source: MICS (2003-04), Punjab Economic Report (2004-05)

determinants
Determinants
  • Much of the variation within district
  • Started exploring tip of the iceberg